1 International Journal of scientific research and management (IJSRM). ||Volume||2||Issue||2||Pages||542-549||2 014||. Website: ISSN (e): 2321-3418. Basic Concepts and Features of good and Service Tax In India Girish Garg Assistant Professor PGDAV College (Evening) University of Delhi Email Id: Abstract This paper is an analysis of what the impact of GST (Goods and Services Tax) will be on Indian Tax Scenario. Here stated with a brief description of the historical scenario of Indian taxation and its tax structure. Then the need arose for the change in tax structure from traditional to GST model. GST has be detailed discuss in this paper as the background, silent Features and the impact of GST in the present tax scenario in India.
2 The Goods and Services Tax (GST) is a value added tax to be implemented in India, the decision on which is pending. GST is the only indirect tax that directly affects all sectors and sections of our economy. Ignorance of law is no excuse but is liable to panel provisions, hence why not start learning GST and avoid the cost of ignorance. Therefore, we all need to learn it whether willingly or as compulsion. The goods and services tax (GST) is aimed at creating a single, unified market that will benefit both corporate and the economy. The changed indirect tax system GST-Goods and Service tax is planned to execute in India. Several countries implemented this tax system followed by France, the first country introduced GST.
3 Goods and Service tax is a new story of VAT which gives a widespread setoff for input tax credit and subsuming many indirect taxes from state and national level. The GST. Implementation is not yet declared by government and the drafting of GST law is still under process and a clear picture will be available only after announcement of Implementation. India is a centralized democratic and therefore the GST will be implemented parallel by the central and state governments as CGST and SGST respectively. The objective will be to maintain a commonality between the Basic structure and design of the CGST, SGST and SGST between states .In this article, I have started with the introduction, in general of GST and have tried to highlight the objectives the proposed GST is trying to achieve.
4 Thereafter, I have discussed the possible challenges and threats; and then, opportunities that GST brings before us to strengthen our free market economy. Key Words: GST, CGST, SGST, VAT, INPUT CREDIT. I. History of Taxation supply, or other name. 1 The first known system of taxation was in Ancient Egypt around 3000 BC - 2800 BC in the first dynasty of the Old Kingdom. What is Tax? Records from that time show that the pharaoh The word tax is derived from the Latin word would conduct a biennial tour of the kingdom, taxare' meaning to estimate. A tax is not a collecting tax revenues from the people. Other voluntary payment or donation, but an enforced records are granary receipts on limestone flakes contribution, exacted pursuant to legislative and papyrus.
5 Early taxation is also described in authority" and is any contribution imposed by the Bible. In Genesis2, it states "But when the government whether under the name of toll, crop comes in, gives a fifth of it to Pharaoh. The tribute, impost, duty, custom, excise, subsidy, aid, other four-fifths you may keep as seed for the fields and as food for yourselves and your Girish Garg, IJSRM volume 2 issue 2 feb 2014 [ ] Page 542. households and your children." Joseph was telling 2000 Implementation of uniform floor Sales tax the people of Egypt how to divide their crop, rates Abolition of tax related incentives granted providing a portion to the Pharaoh. A share3 of by States the crop was the tax.
6 In India, the tradition of taxation has been in force from ancient times. It 2003 VAT implemented in Haryana in April 2003. finds its references in many ancient books like 'Manu Smriti '4 and 'Arthasastra'. The Islamic 2004 Significant progress towards CENVAT. rulers imposed jizya 5. It was later on abolished by Akbar. However, Aurangzeb, the last 2005-06 VAT implemented in 26 more states prominent Mughal Emperor, levied jizya on his mostly Hindu subjects in 1679. Reasons for this 2007 First GST stuffy released By Mr. P. Shome in are cited to be financial stringency and personal January inclination on the part of the emperor, and a petition by the ulema 6.
7 The period of British rule 2007 Announces for GST in budget Speech in India witnessed some remarkable change in the whole taxation system of India. Although, it 2007 CST phase out starts in April 2007. was highly in favour of the British government and its exchequer but it incorporated modern 2007 Joint Working Group formed and report and scientific method of taxation tools and submitted systems. In 1922, the country witnessed a paradigm shift in the overall Indian taxation 2008 EC finalises the view on GST structure in system. Setting up of administrative system and April 2008. taxation system was first done by the Britishers. Broadly, there are two types of Taxes viz.
8 Direct7. and Indirect taxes8. Taxes in India are levied by 3. INTRODUCTION OF GST:- the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as Municipality or Introduction of the Value Added Tax (VAT) at the Local Council. The authority to levy tax is derived Central and the State level has been considered from the Constitution of India which allocates the to be a major step an important step forward . power to levy various taxes between Centre and in the globe of indirect tax reforms in India. If the State. VAT is a major improvement over the pre-existing Central excise duty at the national level and the sales tax system at the State level, then the 2.
9 Major milestones in Indirect Tax Goods and Services Tax (GST) will indeed be an reform additional important perfection the next logical step towards a widespread indirect tax reforms 1974 Report of LK Jha Committee suggested VAT in the country. Initially, it was conceptualized that there would be a national level goods and 1986 Introduction of a restricted VAT called services tax, however, with the release of First MODVAT Discussion Paper by the Empowered Committee of the State Finance Ministers on , it 1991 Report of the Chelliah Committee has been made clear that there would be a Dual recommends VAT/GST and recommendations GST in India, taxation power both by the accepted by Government Centre and the State to levy the taxes on the Goods and Services.
10 Almost 150 countries have 1994 Introduction of Service Tax introduced GST in some form. While countries such as Singapore and New Zealand tax virtually 1999 Formation of Empowered Committee on everything at a single rate, Indonesia has five State VAT positive rates, a zero rate and over 30 categories of exemptions. In China, GST applies only to Girish Garg, IJSRM volume 2 issue 2 feb 2014 [ ] Page 543. goods and the provision of repairs, replacement threshold limit should not be so low to bother and processing services. GST rates of some small scale traders and Service providers. It also countries are given below. Country Australia increases the allocation of government resources France Canada Germany Japan Singapore Sweden for such a petty amount of revenue which may be New Zealand Rate of GST 10% 5% 19% 5% much more costly than the amount of revenue 7% 25% 15% World over in almost 150 countries collected.